USD/CAD jumps to 1.25 neighborhood ahead of economic releases
| • A goodish USD short-covering bounce helps regain traction.
• Retreating oil prices provide an additional boost.
• US/Canadian data eyed for some fresh trading impetus.
Having touched a two-week low near mid-1.2400s, the USD/CAD pair caught some strong bids and is now looking to move back above the key 1.2500 psychological mark.
A decent pickup in the US Dollar demand, supported by a modest uptick in the US Treasury bond yields was seen as one of the key factors behind the pair's recovery of around 40-pips from session lows.
The pair extracted some additional support from a modest retracement in WTI crude oil prices, which tends to drive demand for the commodity-linked currency - Loonie.
It, however, remains to be seen if the pair is actually able to build on the momentum or the recovery is once again sold into as traders shift their focus to the upcoming economic releases from both the US and Canada.
Today's economic docket features the release of Canadian Manufacturing Sales data, which along with housing market data and Prelim UoM Consumer Sentiment from the US might provide some fresh impetus on the last trading day of the week.
Technical levels to watch
A follow-through recovery beyond the 1.2500 handle could get extended towards 1.2535 supply zone, above which the pair seems all set to surpass 1.2570-75 intermediate hurdle and aim towards reclaiming the 1.2600 handle.
On the flip side, the 1.2450 level now seems to act as an immediate support, which if broken would turn the pair vulnerable to head back towards challenging the 1.2400 round figure mark.
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